Buy Apollo Hospitals Enterprise; target of Rs 6000: Prabhudas Lilladher

Prabhudas Lilladher's research report on Apollo Hospitals Enterprise

Apollo hospitals enterprise’s (APHS) reported consolidated EBITDA of Rs 6.3bn (up 23% QoQ); 6% above our estimates. Adjusted for 24x7 losses and ESOP cost (~Rs2bn), EBITDA was at Rs 8.3bn, up 11% YoY. We believe APHS has created a solid growth platform across segments and digital foraying has further made it a strong Omni channel play. The company also has good presence in offline format, making it more of a formidable player than just pure play online company. Though stake sale in Apollo HealthCo has been delayed, scale-up in business is on track. Our FY24E and FY25E EBITDA ex 24x7 broadly remain unchanged. Overall we estimate 15% EBITDA CAGR over FY23-26E (ex 24x7).

Outlook

Maintain ‘BUY’ rating with revised TP of Rs. 6,000/share (earlier Rs5,800/share) as we roll forward. We ascribe 23x EV/EBITDA multiple to hospital segment, 25x to offline pharmacy and 20x to AHLL, assign zero value to the 24/7 business.

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